Which of the following statements is correct?
A) Companies issue preferred shares only to have better control of the firm.
B) Preferred shares pay a guaranteed dividend.
C) Preferred dividends are not tax deductible to the issuing firm.

D) None of the above

Question

Which of the following statements is correct?
A) Companies issue preferred shares only to have better control of the firm.
B) Preferred shares pay a guaranteed dividend.
C) Preferred dividends are not tax deductible to the issuing firm.

D) None of the above

Quizplus · Accepted Answer

Preferred dividends are not tax deductible to the issuing firm, unlike interest on debt.

Which of the Following Statements Is Correct